highlights of the - the heritage foundation1.5% 2.3% 1.0% 2 20 c r hhhts the 12 economic freedoms: a...

H I G H L I G H T S O F T H E

Terry MillerAnthony B. Kim

James M. Robertswith Patrick Tyrrell

80–100 Free70–79.9 Mostly Free60–69.9 Moderately Free50–59.9 Mostly Unfree0–49.9 Repressed

●

●

●

●

●

Economic Freedom Scores

Rank Country Overall Score Rank Country Overall Score Rank Country Overall Score

RANKING THE WORLD BY ECONOMIC FREEDOM

1 Hong Kong 90.22 Singapore 89.43 New Zealand 84.44 Switzerland 81.95 Australia 80.96 Ireland 80.57 United Kingdom 78.98 Canada 77.79 United Arab Emirates 77.610 Taiwan 77.311 Iceland 77.112 United States 76.813 Netherlands 76.814 Denmark 76.715 Estonia 76.616 Georgia 75.917 Luxembourg 75.918 Chile 75.419 Sweden 75.220 Finland 74.921 Lithuania 74.222 Malaysia 74.023 Czech Republic 73.724 Germany 73.525 Mauritius 73.026 Norway 73.027 Israel 72.828 Qatar 72.629 South Korea 72.330 Japan 72.131 Austria 72.032 Rwanda 71.133 Macedonia 71.134 Macau 71.035 Latvia 70.436 Botswana 69.537 Bulgaria 69.038 Saint Lucia 68.739 Jamaica 68.640 Uruguay 68.641 Malta 68.642 Romania 68.643 Thailand 68.344 Cyprus 68.145 Peru 67.846 Poland 67.847 Armenia 67.748 Belgium 67.349 Colombia 67.350 Panama 67.251 Kosovo 67.052 Albania 66.553 Jordan 66.554 Bahrain 66.455 St. Vincent & Grenadines 65.856 Indonesia 65.857 Spain 65.758 Slovenia 65.559 Kazakhstan 65.460 Azerbaijan 65.461 Costa Rica 65.362 Portugal 65.363 Brunei 65.164 Hungary 65.0

65 Slovakia 65.066 Mexico 64.767 Barbados 64.768 Turkey 64.669 Serbia 63.970 Philippines 63.871 France 63.872 Dominica 63.673 Cabo Verde 63.174 Bhutan 62.975 Morocco 62.976 The Bahamas 62.977 Guatemala 62.678 Côte d’Ivoire 62.479 Kyrgyz Republic 62.380 Italy 62.281 Fiji 62.282 Samoa 62.283 Bosnia and Herzegovina 61.984 El Salvador 61.885 Paraguay 61.886 Croatia 61.487 Seychelles 61.488 Oman 61.089 Dominican Republic 61.090 Kuwait 60.891 Saudi Arabia 60.792 Montenegro 60.593 Honduras 60.294 Tanzania 60.295 Uganda 59.796 Burkina Faso 59.497 Moldova 59.198 Russia 58.999 Namibia 58.7100 China 58.4 101 Papua New Guinea 58.4 102 South Africa 58.3 103 Mali 58.1 104 Belarus 57.9 105 Cambodia 57.8 106 Greece 57.7 107 Nicaragua 57.7 108 Tonga 57.7 109 Ghana 57.5 110 Laos 57.4 111 Nigeria 57.3 112 Trinidad and Tobago 57.0 113 Guyana 56.8 114 Madagascar 56.6 115 Sri Lanka 56.4 116 Vanuatu 56.4 117 Senegal 56.3 118 Gabon 56.3 119 Mauritania 55.7 120 Guinea 55.7 121 Bangladesh 55.6 122 Tajikistan 55.6 123 Belize 55.4 124 Comoros 55.4 125 Tunisia 55.4 126 Mongolia 55.4 127 Benin 55.3 128 Vietnam 55.3

129 India 55.2 130 Kenya 55.1 131 Pakistan 55.0 132 Eswatini 54.7 133 Solomon Islands 54.6 134 São Tomé and Príncipe 54.0 135 Guinea-Bissau 54.0 136 Nepal 53.8 137 Ethiopia 53.6 138 Zambia 53.6 139 Burma 53.6 140 Uzbekistan 53.3 141 Maldives 53.2 142 Lesotho 53.1 143 Haiti 52.7 144 Egypt 52.5 145 Cameroon 52.4 146 The Gambia 52.4 147 Ukraine 52.3 148 Argentina 52.2 149 Micronesia 51.9 150 Brazil 51.9 151 Niger 51.6 152 Afghanistan 51.5 153 Malawi 51.4 154 Lebanon 51.1 155 Iran 51.1 156 Angola 50.6 157 Dem. Rep. Congo 50.3 158 Togo 50.3 159 Chad 49.9 160 Liberia 49.7 161 Central African Republic 49.1 162 Burundi 48.9 163 Mozambique 48.6 164 Turkmenistan 48.4 165 Suriname 48.1 166 Sudan 47.7 167 Sierra Leone 47.5 168 Kiribati 47.3 169 Djibouti 47.1 170 Ecuador 46.9 171 Algeria 46.2 172 Timor-Leste 44.2 173 Bolivia 42.3 174 Equatorial Guinea 41.0 175 Zimbabwe 40.4 176 Republic of Congo 39.7 177 Eritrea 38.9 178 Cuba 27.8 179 Venezuela 25.9 180 North Korea 5.9

1The Heritage Foundation | heritage.org/Index

KEY FINDINGS OF THE 2019 INDEX

The results of the 2019 Index of Economic Freedom once again

confirm the importance of economic freedom in promoting rapid growth and sustainable social progress.

• Citizens of “free” or “mostly free” countries enjoy incomes that are more than double the global average and more than six times higher than those in “repressed” economies.

• The link between improve-ments in economic free-dom and economic growth is robust; expanded economic freedom has contributed to a doubling of world GDP in the years since the Index debuted in 1995.

• People in economically free societies live longer, enjoy better health, can access higher-quality “social goods” such as education, and have the resources to become better stewards of the environment.

• Greater economic freedom also correlates with more effective democratic governance and stronger rule of law.

The 2019 Index global average economic freedom score is 60.8, the third-highest level in the Index’s 25-year history. Of the 180 economies ranked, six are considered free, and an additional 88 are considered to be at least moderately free. At the other end of the spectrum, 86 economies received scores below 60 and are judged mostly unfree or repressed.

The slight decline in global economic freedom in 2019 was driven by in-creased protectionism in some major markets, setbacks in judicial effectiveness, and attempts by governments to influence business and consumer decision-making through regulation and government spending.

Singapore New Zealand

Switzerland Australia Ireland

SIX “FREE” NATIONS

Hong Kong

AMERICAS

Canada

EUROPE

Switzerland

MIDDLE EAST/ NORTH AFRICA

United Arab Emirates

SUB-SAHARAN AFRICA

Mauritius

ASIA-PACIFIC

Hong Kong

REGIONAL LEADERS

ECONOMIC GROWTH

Average Annual Growth of GDP per Capita (PPP)

Past 25 Years

Past 5 Years

■ Countries Gaining Economic Freedom■ Countries Losing Economic Freedom

2.6%1.5%

2.3%1.0%

2 2019 Index of Economic Freedom HIGHLIGHTS

THE 12 ECONOMIC FREEDOMS: A GLOBAL LOOK

heritage.org

RULE OF LAW GOVERNMENT SIZE

REGULATORY EFFICIENCY OPEN MARKETS

Several governments made progress in enhancing judicial eectiveness by increasing institutional independence and accountability. Although the global score for property rights improved somewhat in the 2019 Index, scores for government integrity and judicial eectiveness declined. The low average scores for these three indicators reflect a poor overall level of protection for private property as well as the systemic corruption of government institutions by such practices as bribery, cronyism, and graft.

The average top individual income tax rate for all countries in the 2019 Index is about 28.5 percent, and the average top corporate tax rate is 24.0 percent. The average overall tax burden as a percentage of GDP corresponds to approximately 22.2 percent. The average level of government spending as a percentage of GDP is equal to 33.2 percent. The average level of gross public debt for countries covered in the Index is equivalent to about 56.2 percent of GDP.

Many economies have continued to streamline and modernize their business frameworks, and the overall pace of reform in developing countries has generally exceeded the pace in developed countries. Nonetheless, the 2019 Index global score for business freedom declined, reflecting the ongoing temptation among governments to try to micromanage business decision-making to achieve politically motivated goals. Monetary freedom also decreased, reflecting a somewhat greater tendency by governments to control prices.

Global trade freedom suered a setback in this year’s Index, falling from 75.9 to 74.4. Investment freedom remained unchanged, but progress was uneven, and investment policy measures in many countries remain geared toward promotion of sectoral investment rather than general market openness. While the global score for financial freedom was unchanged, financial institutions in many countries continue to face uncertain regulatory environments.

Property Rights

Judicial E�ectiveness

Government Integrity

TaxBurden

Government Spending

FiscalHealth

Business Freedom

Labor Freedom

Monetary Freedom

Trade Freedom

Investment Freedom

Financial Freedom

80

60

70

100

50

066.964.577.2

80

60

70

100

50

042.245.553.0

80

60

70

100

50

048.657.874.4

80

60

70

100

50

075.459.664.1


AS ECONOMIC FREEDOM RISES, THE GLOBAL ECONOMY EXPANDS AND POVERTY FALLS

ECONOMIC FREEDOM AND THE STANDARD OF LIVING

Average Score in the Index of Economic Freedom

heritage.orgSOURCES: 2019 Index of Economic Freedom and The World Bank.

heritage.orgSOURCES: 2019 Index of Economic Freedom and IMF.

Global GDP, in Trillions of 2010 U.S. Dollars

Percentage of Global Population in Poverty

56

58

60

62

1995 2019

$30

$50

$70

$90

1992 2017

0%

10%

20%

30%

40%

1993 2015

60.8

$80.1

10.0%

GDP per Capita (PPP)

2019 Index of Economic Freedom Score

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

20 30 40 50 60 70 80 90 100

Correlation: 0.64

Tren

d

Average GDP per Capita (PPP), by Economic Freedom Category

FREE

MOSTLY FREE

MODERATELY FREE

MOSTLY UNFREE

REPRESSED

$63,588

$47,742

$22,382

$7,829

$7,716

Each circle represents a nation

in the Index of Economic Freedom


The Americas region covers more than one-quarter of the globe’s landmass and is also one of its most economically diverse regions. With a population of just under 1 billion, the region has the second-highest population-weighted average per capita income ($31,288), and its economies have expanded at an average rate of 1.5 percent over the past five years. The regional average rate of unemployment is 6.9 percent, and the average rate of inflation (excluding Venezuela) has dropped significantly in the past year to 4.4 percent. Nevertheless, the region’s average level of public debt, the highest in the world, has climbed to 75.5 percent of GDP.

The region’s slightly lower average economic freedom score in the 2019 Index reflects continuing obstacles to well-functioning free markets in many of its countries, with widespread corruption and the weak protection of prop-erty rights aggravating systemic shortcomings like regulatory inefficiency and monetary instability that are caused by various government-driven and market-distorting programs.

The election in recent years of center-right presidential candidates in Argen-tina, Brazil, Chile, and Colombia may signal a maturing of democratic systems that could help to sustain some momentum for economic and structural reforms and surmount the region’s historical tendency to revert to the authoritarian cronyism that has held back development.

Notable Countries• Barbados achieved the world’s largest overall score increase, with unprec-

edented improvements in scores for fiscal health and government spending.

THE AMERICAS: SUMMARY

32COUNTRIES

Average GDP per Capita, by Economic Freedom Category

Number of Countries in Each Economic Freedom Category

FREE

MOSTLY FREE

MODERATELY FREE

MOSTLY UNFREE

REPRESSED

n/a

$44,101

$15,162

$13,142

$11,734

REPRESSED5

MOSTLY UNFREE

7

MODERATELY FREE

17

MOSTLY FREE3


• Among the region’s larger countries, the biggest improvement in both Index ranking and overall score was by the United States, reflecting the impact of major regulatory and tax reforms.

• Cuba’s continuing steep descent reflects the chronic inefficiency of a heavily statist economy that can no longer extract huge subsidies from nearly bankrupt Venezuela.

Canada

United States

Brazil

Argentina

Colombia

Venezuela GuyanaSuriname

Jamaica

Nicaragua

CubaBelize

Haiti

Bolivia

Mexico

GuatemalaEl Salvador

HondurasCosta Rica

Panama

Dominican Republic

■ Bahamas

■ St. Vincent and the Grenadines■ Dominica■ Barbados■ Saint Lucia■ Trinidad and Tobago

Ecuador

Peru

Uruguay

ParaguayChile

80–100 Free70–79.9 Mostly Free60–69.9 Moderately Free50–59.9 Mostly Unfree0–49.9 RepressedNot Graded

●

●

●

●

●

●


Total population:993.6 millionGDP per capita (PPP): $31,288Infl ation: 4.4% (excluding Venezuela)Unemployment rate: 6.9%

Public debt: 75.5% of GDP1–year growth: 1.6%5–year growth: 1.5%

BY THE NUMBERS


The Asia–Pacific region has over half of the world’s population and spans its largest surface area. Of the total regional population, China alone accounts for a little more than one-third, and India accounts for nearly another third. The region continues to lead worldwide economic growth, with average economic expansion of about 6.3 percent per year over the past five years driven largely by China, India, and other trade-oriented economies. The region also has one of the world’s lowest average unemployment rates (4 percent) and its second-lowest average inflation rate (3 percent).

Although its overall economic freedom score of 60.6 is just below the world average in the 2019 Index, the Asia–Pacific region scored higher again this year than the world averages in seven of the 12 economic freedom indicators: prop-erty rights, judicial effectiveness, tax burden, government spending, fiscal health, business freedom, and labor freedom. In other critical areas such as government integrity, monetary freedom, trade freedom, investment freedom, and financial freedom, however, the region lags behind world averages.

Notable Countries• Despite an increase in Laos’s economic freedom score, the country’s

business environment remains opaque, and intensifying state control does not inspire investor confidence.

• A significant increase in fiscal health boosted Vietnam’s score, but critical reforms in state-owned enterprises and business regulation have lagged.

ASIA-PACIFIC: SUMMARY

43COUNTRIES



FREE

MOSTLY FREE

MODERATELY FREE

MOSTLY UNFREE

REPRESSED

$61,142

$54,646

$18,842

$6,762

$6,811

REPRESSED4

MOSTLY UNFREE

20

MODERATELY FREE

10

FREE4

MOSTLY FREE5


• Although Japan’s overall score declined slightly, “Abenomics” policies like regulatory reform, labor market liberalization, and corporate tax cuts have contributed to an ongoing recovery.

• China’s score improved, but it remains “mostly unfree” with nontransparent state-owned enterprises dominating the financial sector and many basic industries. The official ideology of “Socialism with Chinese Characteristics” has chilled prospects for further liberalization.

Kazakhstan

Australia

New Zealand

Papua New Guinea

Indonesia

Philippines

Malaysia

Singapore ■

NepalBangladeshBhutan

Burma

■ Brunei

LaosCambodiaVietnam

Micronesia ■Kiribati ■

Solomon Islands ■Vanuatu ■

Fiji ■Samoa ■Tonga ■

Thailand

Taiwan

■ Hong Kong

Sri LankaMaldives ■

■ Macau

Timor-Leste

Turkmenistan

UzbekistanAzerbaijan

TajikistanKyrgyz Republic

Mongolia

North Korea

South Korea

Japan

China

India

Pakistan

Afghanistan


●

●

●

●

●

●


Total population:4.16 billionGDP per capita (PPP): $13,103Infl ation: 3.0%

Unemployment rate: 4.0%Public debt: 58.7% of GDP

1–year growth: 6.2%5–year growth: 6.3%

BY THE NUMBERS


Concepts of free markets and individual liberty first took root in Europe, but so did the collectivist philosophies of Communism and socialism. That tension remains in the region’s economic policy mix.

Eighteen of the world’s 35 freest countries (overall scores above 70) are in Europe, thanks in large part to relatively extensive and long-established free-market institutions, robust rule of law, and exceptionally strong investment freedom. At the same time, Europe retains many policy barriers to vigorous economic expansion, such as overly protective and costly labor regulations, high tax burdens, various market-distorting subsidies, and continuing problems in public finance caused by years of public-sector expansion. The result has been stagnant economic growth, which has exacerbated the burden of fiscal deficits and mounting debt in a number of countries in the region.

The region’s population-weighted average GDP per capita stands at $34,960, and inflation is generally under control. However, high unemployment rates (7.9 percent) and growing public debt continue to plague the continent.

Notable Countries• Economic freedom in the United Kingdom increased again, reflecting

the U.K.’s extraordinarily efficient business and investment environments. The U.K.’s pending 2019 departure from the European Union could enable it to expand its global trade relationships.

EUROPE: SUMMARY

45COUNTRIES



FREE

MOSTLY FREE

MODERATELY FREE

MOSTLY UNFREE

REPRESSED

$68,480

$45,416

$27,524

$17,775

n/a

NOT GRADED1

MOSTLY UNFREE

5

MOSTLY FREE16

MODERATELY FREE

21

FREE2


• Montenegro and Latvia experienced sharp declines in economic freedom, with a failure to move forward with privatization of state-owned enterprises a common theme in both countries.

• Germany’s score dipped slightly, but its economy remains among the 25 freest in the world.

• Russia’s economy continues to be severely hampered by blatant disdain for the rule of law, weak protection of property rights, large and corrupt state-owned institutions, and an inefficient public sector that dominates the economy.

U.K.

Ireland

Iceland

Norway

Denmark

Germany

Switzerland

Hungary

Romania

Serbia

Bulgaria

Greece

Cyprus

Turkey

Moldova

Georgia

Armenia

Italy

SlovakiaCzech Rep.

Austria

Poland

France

Spain

Portugal

NetherlandsBelgium

Sweden

Finland

Estonia

Latvia

Lithuania

Belarus

Russia

Ukraine

Malta ■Croatia

Bosnia & HerzegovinaMontenegro

Slovenia

MacedoniaKosovoAlbania

Luxembourg ■

Liechtenstein ■


●

●

●

●

●

●


Total population:828.5 millionGDP per capita (PPP): $34,960Infl ation: 3.7%



BY THE NUMBERS


Middle East and North Africa (MENA) countries are successors to some of the world’s most ancient civilizations and remain at the crux of global politics, but relatively few enjoy economic freedom in the 21st century. At once blessed and cursed by enormous mineral resources, most countries in the region have demographic profiles that tend to be distinguished by extreme concentrations of wealth and widespread poverty. Most worrisome is the region’s ongoing notoriety as the world’s most acute hot spot for economic, political, and secu-rity vulnerabilities.

The region’s population-weighted average GDP per capita is approximately $21,732, the third highest among the five global Index regions. Although mon-etary stability has been relatively well maintained, the MENA region has reg-istered relatively soft economic growth and has continued to suffer from high levels of unemployment, particularly among the young. Authoritarian govern-ments have tended to rely on costly subsidies to quell social and political unrest.

The most vivid illustration of this regional policy failure is the sharp drop in the score for Tunisia, birthplace of the “Arab Spring.” Scores in Egypt, Bahrain, Kuwait, and Lebanon were also lower. The grading of economic freedom for Iraq, Libya, Syria, and Yemen remains suspended because of ongoing violence and unrest.

MIDDLE EAST / NORTH AFRICA: SUMMARY

18COUNTRIES



FREE

MOSTLY FREE

MODERATELY FREE

MOSTLY UNFREE

REPRESSED

n/a

$76,203

$39,277

$16,016

$15,237

REPRESSED1

NOT GRADED

4

MOSTLY UNFREE4

MODERATELY FREE

6

MOSTLY FREE3


Notable Countries• Although Jordan’s score rose sharply, more labor market reforms are

needed, and economic freedom is further constricted by corruption and the judiciary’s vulnerability to politicization.

• Economic freedom increased in Algeria, albeit from a very low base. Efforts to introduce additional economic reforms, however, have been undermined by powerful vested interests.

• Israel’s technologically advanced free-market economy, bolstered by strong trade and investment ties outside the Middle East and the robust rule of law, scored yet another increase in economic freedom in the 2019 Index.

Morocco

AlgeriaLibya

Syria

Iraq Iran

Saudi Arabia United Arab EmiratesQatarJordan

Yemen

Oman

Egypt

LebanonIsrael

Tunisia

Kuwait

■ Bahrain


●

●

●

●

●

●


Total population:433.4 millionGDP per capita (PPP): $21,732Infl ation: 9.7%



BY THE NUMBERS


Scores for the Sub-Saharan African countries generally fall into the low-er categories of economic freedom. Although modest advances in economic freedom have spurred an uptick of economic growth in several countries, the region overall continues to underperform because of repeated failures to im-prove the business and investment climates, strengthen the rule of law, and fight endemic corruption and cronyism. The region’s scores on property rights, government integrity, fiscal health, and business freedom are all lower than world averages by 10 points or more. The population-weighted average GDP per capita is only $4,005, the lowest level of any region. Unemployment hov-ers at 7.5 percent.

Perhaps the most tragic consequence of the dearth of economic freedom in sub-Saharan Africa is its correlation with severe food shortages and poor nutri-tion, both of which are directly and causally related to the region’s political insta-bility, high infant mortality rates, and outbreaks of disease, childhood learning disabilities, and frequent famines. In the longer term, foreign aid from the West cannot solve the food security problem in sub-Saharan Africa. The solution to this problem and to the region’s many other challenges lies in institutionalizing policies that advance economic freedom.

Notable Countries• Cabo Verde’s score increased significantly, reflecting continuing efforts to

expand and modernize infrastructure, improve the business environment, and implement other reforms.

SUB-SAHARAN AFRICA: SUMMARY

48COUNTRIES



FREE

MOSTLY FREE

MODERATELY FREE

MOSTLY UNFREE

REPRESSED

n/a

$11,860

$12,135

$4,316

$5,215

REPRESSED12

NOT GRADED1

MOSTLY UNFREE28

MODERATELY FREE

5

MOSTLY FREE2


• South Africa’s economic freedom score dropped sharply, reflecting severe and chronic policy mismanagement. New leadership has restored macroeconomic stability, but significant reforms are required to boost competitiveness.

• 2019 Index scores plummeted in Zimbabwe, reflecting a plunge in fiscal health and sharply lower scores for judicial effectiveness, monetary freedom, and business freedom, and Sierra Leone, where the government’s failure to implement fiscal consolidation measures was exacerbated by a restrictive regulatory environment, inadequate infrastructure, and weak rule of law.

Mauritania

Senegal

Guinea

Côte d’Ivoire

Sierra Leone Liberia

■ Cabo Verde

Gambia

Guinea Bissau

Mali

Burkina Faso

Ghana

TogoBenin

Equitorial Guinea

São Tomé and Príncipe ■

Gabon

Niger

Nigeria

Cameroon

Central African Rep.

Chad Sudan

Ethiopia

Dem. Rep.Congo

Angola

NamibiaBotswana

South Africa Lesotho

Eswatini

Zimbabwe

Zambia

Tanzania

Malawi

■ Comoros

Seychelles ■

Mozambique

Madagascar

Mauritius ■

RwandaBurundi

Rep.Congo

KenyaUganda

Somalia

Djibouti

Eritrea


●

●

●

●

●

●


Total population:1.01 billionGDP per capita (PPP): $4,005Infl ation: 13.2%



BY THE NUMBERS


THE PROGRESS OF ECONOMIC FREEDOMWhat makes an economy grow and prosper? Since its inception in 1995, the

Index of Economic Freedom has provided powerful evidence that the empower-ment of individuals within a system of open and competitive markets is the answer to that simple yet profoundly consequential question.

As the Index has documented over the past 25 years, the most critical vari-able in sustaining the economic dynamism and wealth of nations is economic freedom, which is really about dispersing economic power and decision-making throughout an economy and—most important—empowering individuals with greater opportunity and more choices.

The Index findings over the past two-and-a-half decades have validated a number of important policy ramifications, including that:

• Private ownership and the protection of free enterprises by the rule of law encourage effort and initiative far more than is possible under collectivism and socialism.

• Governments that dominate their countries’ economies tend to impoverish their citizens through economic stagnation.

• Competition, facilitated by overall regulatory efficiency, promotes greater productivity and a more efficient allocation of resources than does central planning.

• Countries that have adopted and practiced open-market policies in the areas of trade, investment, and banking do better than those that are protectionist or that shun economic linkages with others.

Implementing policies that address these four interwoven aspects effectively creates an entrepreneurial environment that is conducive to practical solutions to a wide range of economic and social challenges that are faced by most of the world’s societies.

The Rise of Global Economic FreedomThe growth in economic freedom over the past 25 years has been steady and

purposeful rather than revolutionary or convulsive. The global average eco-nomic freedom score has increased by 3.2 points, with a significant number of countries joining the ranks of those that are considered to be at least “moder-ately free.” The global average economic freedom score in the 2019 Index is 60.8, the third-highest level in the 25-year history of the Index. This represents a 5.6 percent increase in global economic freedom from 1995.

The growth in overall economic freedom has been driven primarily by advances in policies related to limited government and open markets and to a lesser extent by gains in regulatory efficiency. Since 1995, countries interested in improving their economic performance—and their Index rankings as well—have engaged in a sort of competition to adopt lower tax rates, eliminate burdensome regulations, tame inflation, advance free trade, and open their markets for greater investment.

On the other hand, the absence of progress in advancing the rule of law is alarming. A majority of the world’s countries score below 50 on the three factors


related to this critical institutional aspect of economic freedom, with significant shortfalls apparent in governments’ commitments to enhancing property rights, judicial effectiveness, and government integrity.

The rule of law, especially for developing countries, continues to be the pil-lar of economic freedom that is most important in laying the foundations for economic growth, and in advanced economies, deviations from the rule of law may be the first signs of serious problems that will lead to economic decline. In the never-ending struggle to improve the human condition and achieve greater prosperity, the Index has shown over the past 25 years that policies that pro-mote the rule of law may well deserve a claim of precedence over other desir-able objectives.

Achievers and UnderachieversThe real examples within the Index of the consequences of the rise and fall

of economic freedom in countries around the globe demonstrate unmistakably that economic prosperity is not a national birthright. Rich economies can fall into self-inflicted stagnation all too quickly, and long-suffering underde-veloped nations can ascend from poverty to economic dynamism in a matter of years.

MAKING HUGE STRIDES IN ECONOMIC FREEDOM

heritage.org

Georgia

Lithuania

Rwanda

Bulgaria

Romania

Armenia

Albania

Azerbaijan

Kazakhstan

Serbia

Cabo Verde

Samoa

Bosnia & Herz.

Croatia

Montenegro

44.1

49.7

38.3

48.6

42.9

42.2

49.7

30.0

41.7

46.6

49.7

47.6

29.4

48.0

46.6

1st Year

75.9

74.2

71.1

69.0

68.6

67.7

66.5

65.4

65.4

63.9

63.1

62.2

61.9

61.4

60.5

2019

Overall Scores in the Index of Economic Freedom

807060504030


Countries that have acknowledged the limits of government and continued their commitment to sustaining economic freedom have reaped the tangible rewards of swift economic rebound and renewed dynamism. By contrast, those that have relinquished economic freedom in favor of short-sighted intervention-ist and populist policies have suffered prolonged crises and fallen into the trap of economic stagnation and greater uncertainty.

Globally, 132 countries have improved their economic freedom scores rela-tive to the first year in which they were rated in the Index, and 47 countries have recorded score declines. More notably, 15 developing countries across the globe that were rated as “repressed” in the first year they were graded in the Index have successfully leaped forward into the ranks of the “moderately free” or “mostly free.” This is quite a geographically and economically diverse group, encompassing African countries, Eastern European countries, and members of the former Soviet Union.

It is also notable that the Baltic States have tried to follow the Hong Kong and Singapore example as small nations that open themselves to capital and competition, and they have largely prospered because of it. Estonia, Latvia, and Lithuania, all of which have become “mostly free” economies, have reformed their economies, shrunk the size of their governments, opened their markets, and let the talents of their people emerge.

On the other end of the scale, three countries—Bolivia, Ecuador, and Ven-ezuela—have dropped into the ranks of the “repressed” over the past 25 years. These economies were rated more highly in the first years they were graded in the Index but since then have steadily lost economic freedom.

The Index Beyond 25Perhaps the most critical lesson of the 25 years of Index history is that the

fundamental superiority and value of economic liberty must be retaught to each new generation of political leaders. The link between economic freedom and development is unequivocal: People in economically free societies live longer, have better health, are able to be better stewards of the environment, and push forward the frontiers of human achievement in science and technology through greater innovation.

It is too soon to know how the coming years will play out. Nonetheless, if the past 25 years are a guide, it is safe to predict that countries that find the politi-cal will to advance economic freedom will see their citizens prosper greatly in the years ahead.

80–100 Free70–79.9 Mostly Free60–69.9 Moderately Free50–59.9 Mostly Unfree0–49.9 Repressed

●

●

●

●

●


Rank Country Overall Score Rank Country Overall Score Rank Country Overall Score

RANKING THE WORLD BY ECONOMIC FREEDOM

1 Hong Kong 90.22 Singapore 89.43 New Zealand 84.44 Switzerland 81.95 Australia 80.96 Ireland 80.57 United Kingdom 78.98 Canada 77.79 United Arab Emirates 77.610 Taiwan 77.311 Iceland 77.112 United States 76.813 Netherlands 76.814 Denmark 76.715 Estonia 76.616 Georgia 75.917 Luxembourg 75.918 Chile 75.419 Sweden 75.220 Finland 74.921 Lithuania 74.222 Malaysia 74.023 Czech Republic 73.724 Germany 73.525 Mauritius 73.026 Norway 73.027 Israel 72.828 Qatar 72.629 South Korea 72.330 Japan 72.131 Austria 72.032 Rwanda 71.133 Macedonia 71.134 Macau 71.035 Latvia 70.436 Botswana 69.537 Bulgaria 69.038 Saint Lucia 68.739 Jamaica 68.640 Uruguay 68.641 Malta 68.642 Romania 68.643 Thailand 68.344 Cyprus 68.145 Peru 67.846 Poland 67.847 Armenia 67.748 Belgium 67.349 Colombia 67.350 Panama 67.251 Kosovo 67.052 Albania 66.553 Jordan 66.554 Bahrain 66.455 St. Vincent & Grenadines 65.856 Indonesia 65.857 Spain 65.758 Slovenia 65.559 Kazakhstan 65.460 Azerbaijan 65.461 Costa Rica 65.362 Portugal 65.363 Brunei 65.164 Hungary 65.0

65 Slovakia 65.066 Mexico 64.767 Barbados 64.768 Turkey 64.669 Serbia 63.970 Philippines 63.871 France 63.872 Dominica 63.673 Cabo Verde 63.174 Bhutan 62.975 Morocco 62.976 The Bahamas 62.977 Guatemala 62.678 Côte d’Ivoire 62.479 Kyrgyz Republic 62.380 Italy 62.281 Fiji 62.282 Samoa 62.283 Bosnia and Herzegovina 61.984 El Salvador 61.885 Paraguay 61.886 Croatia 61.487 Seychelles 61.488 Oman 61.089 Dominican Republic 61.090 Kuwait 60.891 Saudi Arabia 60.792 Montenegro 60.593 Honduras 60.294 Tanzania 60.295 Uganda 59.796 Burkina Faso 59.497 Moldova 59.198 Russia 58.999 Namibia 58.7100 China 58.4 101 Papua New Guinea 58.4 102 South Africa 58.3 103 Mali 58.1 104 Belarus 57.9 105 Cambodia 57.8 106 Greece 57.7 107 Nicaragua 57.7 108 Tonga 57.7 109 Ghana 57.5 110 Laos 57.4 111 Nigeria 57.3 112 Trinidad and Tobago 57.0 113 Guyana 56.8 114 Madagascar 56.6 115 Sri Lanka 56.4 116 Vanuatu 56.4 117 Senegal 56.3 118 Gabon 56.3 119 Mauritania 55.7 120 Guinea 55.7 121 Bangladesh 55.6 122 Tajikistan 55.6 123 Belize 55.4 124 Comoros 55.4 125 Tunisia 55.4 126 Mongolia 55.4 127 Benin 55.3 128 Vietnam 55.3

129 India 55.2 130 Kenya 55.1 131 Pakistan 55.0 132 Eswatini 54.7 133 Solomon Islands 54.6 134 São Tomé and Príncipe 54.0 135 Guinea-Bissau 54.0 136 Nepal 53.8 137 Ethiopia 53.6 138 Zambia 53.6 139 Burma 53.6 140 Uzbekistan 53.3 141 Maldives 53.2 142 Lesotho 53.1 143 Haiti 52.7 144 Egypt 52.5 145 Cameroon 52.4 146 The Gambia 52.4 147 Ukraine 52.3 148 Argentina 52.2 149 Micronesia 51.9 150 Brazil 51.9 151 Niger 51.6 152 Afghanistan 51.5 153 Malawi 51.4 154 Lebanon 51.1 155 Iran 51.1 156 Angola 50.6 157 Dem. Rep. Congo 50.3 158 Togo 50.3 159 Chad 49.9 160 Liberia 49.7 161 Central African Republic 49.1 162 Burundi 48.9 163 Mozambique 48.6 164 Turkmenistan 48.4 165 Suriname 48.1 166 Sudan 47.7 167 Sierra Leone 47.5 168 Kiribati 47.3 169 Djibouti 47.1 170 Ecuador 46.9 171 Algeria 46.2 172 Timor-Leste 44.2 173 Bolivia 42.3 174 Equatorial Guinea 41.0 175 Zimbabwe 40.4 176 Republic of Congo 39.7 177 Eritrea 38.9 178 Cuba 27.8 179 Venezuela 25.9 180 North Korea 5.9

Founded in 1973, The Heritage Foundation is a research and educational institution—a think tank—whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.

We believe the principles and ideas of the American Founding are worth conserving and renewing. As policy entrepreneurs, we believe the most effective solutions are consistent with those ideas and principles. Our vision is to build an America where freedom, opportunity, prosperity, and civil society flourish.

Heritage’s staff pursues this mission by performing timely, accurate research on key policy issues and effectively marketing these findings to our primary audiences: members of Congress, key congressional staff members, policymakers in the executive branch, the nation’s news media, and the academic and policy communities.

Governed by an independent Board of Trustees, The Heritage Foundation is an independent, tax-exempt institution. Heritage relies on the private financial support of the general public—individuals, foundations, and corporations—for its income, and accepts no government funds and performs no contract work. Heritage is one of the nation’s largest public policy research organizations. Hundreds of thousands of individual members make it one of the most broadly supported think tanks in America.

For more information, or to support our work, please contact The Heritage Foundation at (800) 544-4843 or visit heritage.org.

highlights of the - the heritage foundation1.5% 2.3% 1.0% 2 20 c r hhhts the 12 economic freedoms: a...

Documents